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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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528

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480

TOPIC FREQUENCY

Costco 14, Steve 11, Europe 10, Apple 10, Us 6, S&p 5, Spain 5, U.s. 5, Tim Cook 5, Joe 4, China 3, Charles Schwab 3, United States 3, New York 3, Nexium 2, Google 2, Verizon 2, Maria Bartiromo 2, Carol 2, Jeremy 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    September 28, 2012
    3:00 - 4:00pm EDT  

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months of the year? that's what we're going to zero in on as we look ahead. first a look at how we've done today. the return for the major averages during this day. midday, when the results of the stress test on spanish banks came out around noontime and they were not nearly as bad as had been feared. so we retraced some of the losses from the morning. now down 44 points on the dow at 13,441. still a 6%, 7% gain for the dow for the quarter. nasdaq's down 12 right now at 3123. the s&p 500 index is down about five points at 1441. >> we want to look at the history books. if history is any guide, things should be looking good for the bulls in the next few months. according to s&p capital iq, since the year 2000, the third quarter has only been negative three times. >> the index has seen an average
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gain in past fourth quarters. what about this year, especially in light of the elections, the unresolved fiscal cliff issue, all this quantitative easing money out there, the uncertainty in europe? let's look ahead in today's "closing bell" exchange. you know, carol, we've had this discussion this week about the games in the market don't seem to reflect the declines in the economy. there's sort of a disconnect. i think you agree with that, don't you? >> i absolutely agree with you, bill. i think all of september the market has been moved, not by what's going on here in the united states, but what's been going on in europe, which says to me two things. one, any bad news out of europe is going to send the market down. two, eventually people are going to have to pay attention to what's going on in the united states. i'm expecting we're heading into earnings season, i'm expecting anemic growth, and eventually
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that's going to have to play into the situation here. i mean, i know you don't fight the fed, but eventually we have to come back to what's going on in terms of fundamentals and stop focusing on monetary policy. >> what do you think? are we going to focus on fundamentals? if you are, kurt, would you be a seller of this market? >> we are focused in on fundamentals. i think this has been a tug of war between the reflationists and some of the risk that's been perceived in the market. we're not investing in gdp. we're investing in earnings. so far, earnings has held up. so far this year the stock market has been doing well. we'll focus on earnings. in terms of am i a buyer here, i'm taking selective positions because i think the market is at the upper end of our fail value range. not a lot of upside from here. >> ron, you've been positive on this market. what about now? are you feeling like we're due for a bit of a correction? >> as we spoke last week, you know, it wouldn't be out of line for the market to have a 3, 5, 7% correction.
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the fed policy is one of the fundamentals you have to look at. since it's going to be easy for as far as the eye can see, the european central bank is getting easier. the central banks in brazil will continue to ease. that is a big issue. earnings may be more challenging in the third quarter. again, as i said last week, i would selectively take profits. i wouldn't get overly bearish. >> in terms of overly bearishness, i mean, we are expecting a contraction in earnings for the third quarter, ron. we're going to be getting those numbers out in the next two weeks. do you think it's priced into the markets to have a negative performance? >> you know, as pointed out, earnings expectations have also come down. that diminishes the likelihood of a raft of negative surprises. there could be some. we've seen fedex, caterpillar, a variety of companies talk about how difficult it is overseas. i still think the economy in the u.s. looks better than most people would argue.
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the up tick in housing may be very helpful to the unemployment situation. so i wouldn't get overly bearish on the economy either, given that sector is finally starting to improve. >> rick santelli, as i mentioned, midday the results of those stress tests on the spanish banks came in not as bad as feared. that took the sheen off the treasury rally we'd had to that point. what are you watching otherwise right now? >> well, it took the sheen off, but we're still a couple basis points down on the day. we're still down a dozen basis points on the week. traders are going to continue to monitor the realities of spain, the realities of whether a bailout will be requested. you know, as carol knows from her book, if 90% of all the entrepreneurs don't succeed, it's not going to help them in the stock markets are up. what will help them is if the fundmentals are up. >> wow, carol, you have a fan of your book. >> we're chicagoans.
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we stick together. >> where do you stand on europe right now? are we seeing a situation where they're starting to slowly get their act snogt maybe spain won't need as big a bailout and has been feared before. >> i don't know. i mean, i tend to be contrarian by nature. i think that they're playing everybody's favorite game show, which is pass the buck. eventually the buck has to stop with somebody. there's a lot of talk and not a lot of action. we'll see when the action actually happens. i think that there's -- everybody's focusing on what they're talking about, but we don't know what the specifics are there. i have a bad feeling that that's going to end up sending us in a downward spiral. if it's not next quarter, sometime next year. >> so you're not enough of a contrarian to buy european equities yet? >> not yet, bill. >> so in terms of europe, do you think things continue to stabilize? i mean, we had the worries once again renewed this week with all of those protesters in spain.
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kurt, what do you think? would you be looking at europe for opportunities and values? >> not just yet. full integration is still a long way off. they still have this sort of staggered step to getting towards the full resolution of this. i'm not yet ready to be a buyer into europe yet. >> all right, folks. thank you all very much. we're going to continue to look ahead here. thanks for your thoughts on what may be coming for the fourth quarter of 2012. right now the dow is down 48 points. we're about the midpoint of the range today as we head toward the close. >> we're rocking the final day of the quarter. keep it here. you won't want to miss a minute of this friday edition of the "closing bell." danger zone. will the fiscal cliff torpedo stocks in the final quarter of the year? one of the top defense analysts gives you his list of losers and winners next. attention amazon shoppers, the online retail giant has its sights set on selling wine. and oops, tim cook
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apologizes for apple's half-baked map app. is this his first big mistake of the ceo? we'll get to the core of the matter. at optionsxpress we create easy-to-use, powerful trading tools for all. like our all-in-one trade ticket. we put strategies, chains and positions all on one screen. start trading today with optionsxpress by charles schwa start trading today with for many, nexium helps relieve heartburn symptoms caused by acid reflux disease.
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well, can you believe we're on the doorstep of the fourth quarter? this monday we kick off the first trading day of the fourth quarter. all day we are breaking down the head winds facing specific industries in q-4. jane wells is here with a look at the defense sector. >> here's what to watch for in the defense sector in the quarter ahead. it's all about preparing for the possibility congress will not resolve the budget crisis, trigger an estimated $55 billion in defense cuts just next year. cuts where? the pentagon won't say. many analysts see lockheed's f-35 program most at risk. goldman sachs says the current
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downsizing environment increases the potential for m & a activity. with the clock ticking down to fiscal armageddon, expect defense companies to send out layoffs after the holiday. that's your q-4 channel check for defense. i'm jane wells. >> all right. so let's dig deeper into which defense stocks could feel the biggest impacts if we go off the fiscal cliff. >> joining us is jeremy devaney. do you think we'll see those sequestration cuts in defense next year, $55 billion? >> good afternoon, bill. thanks for having me on. yes, we definitely think the fiscal cliff is coming, especially the sequestration cuts or the budget cuts for the defense department. right now the polarization up on the hill is not allowing for any movement in legislation to resolve that issue. >> all right. so let's talk about sort of breaking this down. first off, when are you expecting the defense companies to alert employees that their
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jobs will be cut? is that october 1st or november 2nd? what's your end date? >> sure. we're looking at november 2nd right now as the real date. department of labor gave a bit of an advisory statement memo a few weeks back. they have no regulatory oversight on the act. they were a little out of line with providing that guidance. right now we think the general councils of the companies are going to provide the best insight as to when that's going to happen. that looks like november 2nd. >> who suffers most? is this across the board? are there specific areas of defense you would avoid the most anticipating these cuts, or how do you play this? >> when we look at defense sector right now, what we've been recommending to clients is to take a concentrated niche focus in high priorities of the defense budget. we're looking at un-manned systems, intelligence surveillance reconnaissance. within that, we like aeroenvironment best.
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we have a buy rating at a $27 price target. >> how significant will the layoffs be? >> they're questionable. right now it's looking like 2 million in total nationwide, including government employees, from some reports. that number may be a bit inflated. the reports are coming from industry. we question whether or not there's a bias to those reports. >> the timing -- you're item id -- itemizing. this is before congress goes back to work to fix this crisis. is it possible notices go out when they do just to highlight what could happen as a scare tactic to get congress back to work? >> congress is already on a recess. they're on a recess all the way through the elections. actually, the government employee union has a 90-day notice policy, which would actually go out at the beginning of october. so the dates are kind of insignificant at this point.
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we're looking more at the nominal dollar effect, the total addressable market shrink for the defense market. it's going to be quite significant. >> i look at it the other way, actually. initially, i thought they had to tell employees by october 1st. so if it was october 1st, by the time the election came around, it would be out there. you can hide it if you go -- by november 2nd, you might get away with it without having voters notice new layoffs because the election's only a few days away. i look at differently. >> if they're going to lay off 2 million people, that's a lot of votes, don't you think, jeremy? >> that is a lot of votes. we try to abstain from political opinion here. we're financial analysts. we'll try to avoid making a political statement. >> well, we're not trying to get you to pick a party, but the impact that could have on the election, that's what we're thinking about. >> let me ask you about the significance of the cuts. how big of a drop in business are you expecting from the large defense companies?
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how significant is this piece of business that will go away? >> sure, maria. right now it's projected to be about $54.6 billion in defense spending next year. what we've done in our analysis is related that to about 14% year over year declines for companies that are broadly exposed to the defense department. what we do in analyzing is look at the prorated portion of defense exposure and apply those cuts. for firms like elf reed where we're underweight, it could be a $1.4 billion hit to their top line. >> real quick, did the white house ask the defense companies to push it out to november 2nd? a lot of people had that october 1st deadline. >> there's been no guidance from the defense department to the companies. it's really up to the general council of the companies at this point whether or not they think this is a clearly definable risk
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out there in the environment. if that's the case, under the warren regulations, they have to give notice. it's 60 days in new york city as far as i know. >> jeremy, good to have you on the program. >> thanks, jeremy. >> excellent. take care. >> 45 minutes left in the trading day. we have the market down about 40 points on the dow jones. >> coming off the lows. good news. now you don't have to leave the house to buy wine. amazon will have it delivered right to your door. however, costco has cheap wine too. don't forget. will amazon dent costco with this move? we'll look at that coming up. also, apple's surprising apology from ceo tim cook about the new map app disaster. would steve jobs have done that? we'll look at that coming up. then, if a body is found buried in your front yard, will you move out? maybe not if it's the long lost body of jimmy hoffa. could make that home a landmark. that and more coming up on the "closing bell." stay with us.
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certainly it was a solid third quarter for the stock market, but then you look at energy prices and how they fared. that's a different story. >> yeah, you know, if you look at oil prices here, crude prices are still down today, but what a quarter it has been. all the worries about the tensions between iran and israel with those iran sanctions going into effect at the beginning of
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this quarter also helping to boost. the big story this quarter, and certainly today, has been gasoline. despite the fact that normally we see prices starting to come down during this quarter, they have actually ratcheted up the best quarter we've seen in years. today we had a huge explosive short move at the end of the day, maria, that really, really punctuated the problems we're seeing with all these refinery problems and shortages on the east coast with gasoline. >> all right, bertha. thank you so much. forget the tablet wars, how about the wine wars? "the wall street journal" today reporting that amazon is planning to enter the wine business. oddly, this pits amazon against retail giant costco, which currently sells wine and alcohol at many locations. so with amazon entering this space, should costco investors be worried? let's talk numbers now. on the technicals, jgreg is wit me. he's the founder of chart lab. on the fundamental side, joe is
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here. good to have you on the program. thank you so much for joining us. good to see you. let me begin with you, joe. we want to look at costco. should costco be worried that amazon is now competing against it on yet another front? >> i don't think costco should be that worried. i don't think that's the primary reason why people go into costco. i think people get tremendous value at costco. wine is something that they do sell in addition to all the other great consumable items. >> all right. let's look at the charts. greg, just look at the charts, which is more attractive? >> i think it's costco. i'll show you why. if you look at the amazon chart, it went from 190 up to 264 from last april. nice 30% uprise. now it's sort of turning over a little bit. it's come off 15 points in the last two weeks. however, the moving average line, the slope of it is positive, which means most investors are still comfortable. the problem is if it continues to turn over and test this trend line here which comes in at about 240, you could have the
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moving average line slope negative or turn over. that would be pretty bearish for amazon. >> i see. so would you be buying costco in the meantime? >> i wouldn't buy costco. it's in sort of the same holding pattern. i'd be more comfortable holding costco than amazon. >> would you sell it here or wait? >> i would wait. with costco, i wouldn't sell it unless it got below 98.5. >> joe, you're pretty strongly on the fundamental story on costco. >> absolutely. still very strong. their core comp, 4 or 5%. pretty consistent against tough numbers from the past couple years. they're really hitting it right now. >> okay. we will leave it there. good to see you both. greg, thank you. joe, see you soon. bill, over to you. >> all right. heading into the close, we have 35 minutes left. the dow is down 53 points as we head toward the end of the quarter. meantime, we'll talk about whether steve jobs would have made the big apology that apple
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ceo tim cook made over apple's map app. then, this video caught fire yesterday, and it's blasting through the web. >> everybody in cleveland -- [ inaudible ] >> she's talking about a real program. coming up, we'll talk to the congressman who tries to stop this program in its tracks. stay tuned. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 trade at charles schwab for $8.95 a trade. tdd#: 1-800-345-2550 open an account and trade up to tdd#: 1-800-345-2550 6 months commission-free online equity trading tdd#: 1-800-345-2550 with a $50,000 deposit. tdd#: 1-800-345-2550 call 1-866-294-5412.
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welcome back. here's something you don't hear very often. an apology from apple. it all comes after users criticize the new map application. john ford joining us now. what exactly is tim cook thinking? is this something you could have seen steve jobs doing? >> well, yeah, marimaria. i can't tell you exactly what he's thinking. he's signaling to people this is a big deal. he's in the going to try to spin it. the only fix is to gradually make this product better. would steve jobs have apologized? maybe. four years ago when the mobile
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me service flopped, jobs sent a message internally to employees that conveniently leaked. it didn't say i'm sorry, but it said we screwed up, and here's what we should have done better. this map app is more of an issue. navigation is a central part of the mobile experience. i believe this is a pivotal moment for apple. the company's culture is set up to make it good at systems but bad at services. good at secrecy, bad at apologizing. steve jobs never successfully shifted the culture to fix the internet services problem. i think tim cook is signaling he's going to try. i'll add this quickly. it's crucial he succeed because between maps, i-cloud and other services, apple is going to have to get this right to protect the eco system. >> thank you so much. is this maps mess tim cook's first major mistake at apple? is it something founder steve jobs would have done? will it create end roads for rivals like google and samsung?
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jay thinks is this a troubling sign while roy says the issue really is minor. jay, this is more evidence for you that you feel apple's better days are behind them, yes? >> well, their best days were just when they invented the iphone and the ipad. i don't know how any company will have better days than that. i think they still have very good days ahead of them. i think this is a worrisome sign because it's software that's core to the company, core to the experience of the ipad and iphone. they had to get it right. they knew they couldn't screw this up. somehow they did screw it up. >> roy, you said tim cook did the right thing by apologizing and it's not such a big deal. tell us how you feel. >> definitely. when the original iphone 4 rolled out, steve jobs' immediate response was, you're holding the phone wrong. he got a lot of backlash. a few days later, they released bumpers to everybody. they admitted there was an issue. they changed it. obviously there was an error and they've fixed it. but there was a lot of backlash. so tim cook learned from steve
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jobs' mistakes. this time early on he fessed up and said we're going to solve the problem soon. >> i get the apology. i understand that. it's reflects tim cook's personality the way a non-apology would more accurately reflect steve jobs, but does it show weakness on the part of apple now to be kinder and gentler than they otherwise would have been under steve jobs? >> i don't think so. i don't see that at all. what are they going to do? put their head in the sand and pretend it's not happening? you have to address it head on. >> that's a fair point. >> i don't know. i think at some point you make it popular di-- i mean, john fo pointed out. the other problem they had years ago, steve jobs center the internal memo out but never said anything publicly. >> when the iphone first came out, they charged a higher price and then lowered. steve jobs apologized for that
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saying we'll try and make up the to you. he has apologized in the past when they screwed up. this isn't unprecedented. even if it was, tim cook can't run the company thinking, how would steve have done it? he's got to make it his company. >> great point. you want to buy apple stock right here? >> buy apple stock? i think that apple has an opportunity to sell a lot of phones, sell a lot of ipads. you're going to see the sales go up, profits go up. if you want to buy the stock based on that, it's your decision. >> what do you think? i'm asking you. >> what do i think? >> yeah, is it too expensive or not? >> fii don't like to give out stock advice. i'll be totally honest. if you buy into the story and the story is they're going to sell a lot more products and profits and sales are going to go up, then buy into the stock. i think that's something for someone else to decide. >> we got that. roy, what about you? it has pulled back appreciably from the $700 mark not too long
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ago. what do you think? >> definitely. you look at the chinese market and how much apple is not yet a huge presence in that market. they've got a lot of potential, and they're rolling out international sales tonight. they're selling remarkably well. they're going to do as well as they did in the united states. china is just going to get larger and larger. i would recommend buying it. >> all right, gentlemen. i'm sorry, but we're out of time. i apologize for that. >> not that big of a deal to say you're sorry. >> we're sorry. we're sorry. >> did feel good. you're right. see you later. >> you crack me up. 30 minutes before the closing bell sounds for the day and for the quarter. we have a market that's worsening here. down about 60 points on the dow jones industrial average. >> coming up, the best on the street to help you get ready for the start of the fourth quarter, which begins monday. some think there are october storms ahead for the final three months of the year. and are the huge tax hike on top earners in france today a preview of coming attractions of
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what will happen in america? that and more coming up on "closing bell." ♪ ♪ ♪ [ male announcer ] at&t. the nation's largest 4g network. now covering 3000 more 4g cities and towns than verizon. at&t. rethink possible. now covering 3000 more 4g cities and towns than verizon. well, if itmr. margin?margin. don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question. it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups. you found a better way. that's logistics. that's margin. find out what else ups knows. i'll do that. you're on a roll. that's funny. i wasn't being funny, bob. i know.
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intensifying. for the third quarter, all major averages are higher. >> a couple top performing stocks on the nasdaq this quarter include sirius xm radio. google hit several new all-time highs. gilead is also a high performer, gaining nearly 30%. on the losing side, dell analysts more concerned about the health of the pc market as tablets become more popular. netflix lost about 20% in q-3. a quick look at apple, the biggest stock on the nasdaq. interestingly enough, it was not one of the best performing stocks. still gaining 15%, getting beat by google. see you in q-4. >> see you later. thanks very much. just want to point out we're slipping here in the final hour. down 77 points.
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that is the low of the session right now. so maybe some profit taking from what has been a strong quarter anyway. >> end of quarter selling, yeah. >> we want to talk with our guests here joining us. what do you make of this selloff here? you've been skeptical of this market anyway. >> 16 of the last 18 septembers, the market has sold off the last day of september. this is positioning. there is concern about the coming earnings numbers. you're looking for a much more muted earnings report for the third quarter that will start in a few days and, of course, the spain issue has resurfaced social unrest. just want to say empire state of mind, jay-z inaugurates tonight the arena. go, jay-z.
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go, brooklyn. >> steve, let's talk about what's going on here. we have the dow jones industrial average down about 80 points. you think it's end of quarter selling as well. you have an interesting take on what's going on with managers trying to track what apple is going. >> you've spent a lot of time talking about apple. how that translates into a portfolio manager is different. if you get apple right now and it makes your whole year -- if you've been overweight until now, you've outperformed. if you get out now and it goes down significantly, it could make your year. i think most managers are really watching apple because it's such a large weight in the s&p 500. >> and tracking other stocks as well? if apple is going down, they want to sell more than apple. >> you probably want to sell a little bit of everything. you're also looking at google. it's outperformed dramatically in the last couple weeks. also, a large percentage of the nasdaq. usually they trade together. >> bob, i'm hanging this on our
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friend peter. i haven't done the math myself. according to peter, at these levels right now, the s&p is now below where it was before qe-3 was announced. we've given up all those gains that the market achieved after quantitative easing was announced by the fed. >> this is a tough call for the fourth quarter. all anybody wants to talk about is what's going to happen. as long as the fed and the ecb are being aggressive, and as long as there's the path to calming things down in europe, the stock market has been holding up. i happen to agree with that position. what disturbs me a little bit as we end the quarter is the transports bill had been down three months in a row. the dow industrials have been up three months in a row. that's almost unprecedented. it's sending a little bit of a troubling signal. that's something the bears are holding on to right now. i think that's a bit of a cause of concern. >> bob, add that to china being down 6% on the year and the
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baltic shipping index which we've talked about being down. definitely everybody is focusing on europe. china is slowing too. the global growth is coming down. we just lowered our u.s. number to 1.4% to next year, down from 2.1 this year. that will put pressure -- and that's without a big fiscal cliff. >> everybody tried to play this last quarter. we were playing the global slowdown story last year. it's turned out actually global indices have not done that bad this quarter. in some cases, they outperformed the u.s. i agree with you in theory, but the central bank intervention and calming things down in europe is making that case difficult. >> steve, i want to go back to your thoughts on what's in the mind of the investment managers out there right now. how soon do you think, if the anticipation is that the capital gains rate is going to go up next year appreciably, when do they start taking profits now so they can lock in at a lower rate? >> i think you see it in sectors. we sold our utilities about a
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month ago because we were concerned the group was overvalued. there are a lot of companies that are thinking about doing a one-time dividend before year end. so there's the haves and have nots. i think the global story is a big deal. you're seeing steel companies just collapsing. i'd rather have a higher beta play in the u.s. and a lower beta play in europe and overseas. >> earnings are expected to be down for the third quarter. they're expected to rebound in the fourth quarter. let's go through some highlights of the fourth quarter. do you think the negativity in the third quarter, the contraction, is priced into this market or no? >> well, we have qe-3 and mortgage-backed securities purchases. yields are going to be suppressed for another year or so. i think that will result in better economic growth than people think. >> maria, energy, materials, and telecom are supposed to be down 15% to 20 this third quarter --
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>> energy and materials the worst? >> the worst. also, telecom. you want to keep your eye on the moody's report. maybe about to downgrade spain's debt. they're one notch above junk. they're baa. if they go down one more, that's a big thing. also, the report on greece. don't forget congress is in session only ten days between now and what they recess for the year on december 14th. >> that's plenty of time to fix the fiscal cliff, don't you think? >> no, it's not. >> i know. is there anything you would buy right now? >> you could nibble at some qualcomm, microsoft. you could nibble at some oracle. >> but you're only nibbling. >> i would buy more aggressively apple here. this is what happens every time apple comes out with a new product. there's overdemand. there was a riot last week. everybody is down on the maps with apple. apple -- >> you think that's all noise?
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>> the lines -- go up town and look at the lines for this new apple iphone 5. we're still believers in apple. i think you could take some -- you start to spoon some technology stocks on to your plate here. >> what about financials, steve? i mean, s&p capital iq is expecting financials to see a real bounce back in the fourth quarter. very strong. almost 6% earnings growth. they're saying lbo activity was stronger. you're talking about mortgage-backed securities. that's going to be stronger. would you buy the financials or have we seen the move in that group? >> you know, we've had a great run in the big banks. we've owned them. we're sticking with them. where the real opportunity now is, you know, you got cap one financial, a cheat stock, good business model. big numbers and the stock was up. you have hartford, which is realigning their business. stock is going up. metlife is just about to do a similar restructuring. within financials, the big banks are okay. i think you have unique
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opportunities in cap one and met life where there are catalysts coming up for the next three months. they're so inexpensive. could carry the whole group up. >> it's true that earnings are going to be weak in the third quart quarter, but overall, earnings in 2012 will be up about 5%. that's the weakest it's been in several years. it's still growth. so far, the numbers are looking not bad for 2013. i know there's no top line growth, and i'm worried about that too, but they still have small gains. >> the asset class we haven't talked about is the one everybody looks to for income a lot of times, the debt market, the treasury market, the corporate bond market. what are your expectations in the fourth quarter there? >> bill, we would take some money and add to high grade. that's investment grade corporate bonds. we would take it out of treasuries which are very high priced low yield. we'd stay short in the short duration bonds. we have right now a market waiting in junk bonds, although they are -- our analyst believes that they have become rich, and
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this week he downgraded to neutral weight to overweight in junk bonds. >> real quick, is there a strategy for the fiscal cliff? in other words, do you want to be selling some of these companies that will see these federal programs going away? defense, health care, transportation. >> we're significantly underweight defense for that reason. a lot of the programs they're working on, you know, tank problems are probably not the most relevant products. it's like cold war technology. we're underweight defense. that seems like the obvious one. i haven't thought of too many other sectors. >> the best single acting group in a presidential year since 1950 are the defense stocks. they always do best in the fourth year. they have had a big run since june. might be time to take a little off the table there. there will be a psychological move out of these because of the sequestration, which comes from the latin word for hide. >> i knew you'd get one in there. thanks, guys.
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>> we'll see you soon. >> heading toward the close, 15 minutes left. the last closing bell before the end of the quarter. the dow down 49 points. that selloff a moment ago, never mind. >> never mind. coming up in the next hour, he's the prime minister of one of the wealthiest nations of the world. he controls what qatar invests in. my interview with him and what he's buying now. after the bell, we'll tell you which stock is the real zombie of the third quarter. it's coming back to life after a long time on the ground, but can the run-up continue? that and more coming back. amerie in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one.
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welcome back. you may remember this market was down about 80 points just a little while ago. it's coming back. we're looking at a decline right now of 35 points. real volatility in this final 15 minutes. >> tremendous volatility. a lot of give and take here. pushing and pulling. if you use this as a proxy of what they're expecting to happen at the beginning of the fourth quarter, it's anybody's guess right now what the thinking is on wall street. >> we really got end of quarter sort of allocations and movement here. we've been seeing just wild moves in the market. we'll keep watching. we have about ten minutes before the close. you may remember on tuesday we
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spoke with jeffrey's analyst about his price target. here's part of our conversation. >> is this a good take over target in your view? >> no, not at current prices. >> not at curr prices? it was at $50150 a share. it's at six. what's a better price than six? >> i think three is not bad. three is maybe where we start to see interest. >> is that where it's going, three? >> we have a $5 target. we think it could undershoot it if our numbers are too high. >> of course, after that interview that you did with peter, r.i.m. stunned the street with better than expected earnings. since then that call on tuesday by peter, r.i.m. shares are up more than 25%. it's up 7% today at seven and change. peter's on the phone. i don't know if you're calling on your blackberry or not. were you as surprised as the rest of the street by that earnings report? >> we were. that was a great report. management executed unbelievably well. first time in, geez, years.
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it doesn't change anything, sadly. >> so it doesn't change your call? >> not at all. no new phones. they're still losing market share in every major market except where iphone isn't. if you're in the subsaharan, africa, middle east, you're still buying blackberries. the great thing about apple and android devices is they can go in those countries as well. >> you have a target of $5, but you think it could shoot down to three. does this make it a likelier takeover target, or is there not enough value there? >> for anyone to take this firm over, they really need to believe in blackberry 10. until we see it -- and interestingly, the firm took the unusual step of leaking it to the press today. the touch device and the keyboard device. we were unimpressed. we think until we see where that goes, it's going to be hard for anyone to step in.
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>> there was a lot of buzz about the cash levels that had gone up, that they feel they can now use to more effectively market the blackberry 10 when it comes out early next year. you're not impressed? >> they did a great job of managing working capital. you have to hand it to them. the cfo hit the ball out of the park. the great thing about working capital is that it can also swing the other way. as soon as they start building these new blackberries, it will whip the other way. you could burn 500 million plus in cash pretty quickly. they have enough cash to launch bb-10, but if it doesn't work in a quarter or two, it would be really tough for them. >> all right, peter. good to have you on the program. thanks for calling back in. we appreciate it. >> thanks for having me. >> wonder what he was calling on. what phone was he using? >> i'm going to bet an iphone. >> you think? >> yeah. >> coming up next half hour, maria asks qatar's prime minister if he's going to block a major mining deal.
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>> yeah, that's coming up. first, we're moments away from the very last closing bell of the quarter. up next, we'll break down the winners and losers. back in a moment. [ male announcer ] you are a business pro. monarch of marketing analysis. with the ability to improve roi through seo all by cob. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. i'm going b-i-g. [ male announcer ] good choice business pro. good choice. go national. go like a pro.
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okay. we're back. we've got about five minutes left in the trading session here. we're about the midpoint of the trading range for the day so far. i want to show you these chart patterns on the market for the quarter. these are quarterly charts. let's see if we can figure out what may happen in the fourth quarter as a result of this. here's the euro in the quarter. good gains until the early september. now remember this chart pattern here because we had this correction and still a gain of 1.5%. next chart, as the euro goes higher, so does the yield on the ten-year note. then you get this correction. you have a correction again here. we're down for the quarter to 1.63%. hit 1.9% at one time. oil also went higher. big correction. you see the pattern here that was going on during that time? 8% gain on crude oil in new york to $92 a barrel. it did hit $ 100 at one time.
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what didn't correction? gold. isn't this interesting? hit that peak and his since gone sideways. we're at 1774. then the dow itself also achieving these gains and going sideways essentially for that time to a gain of 4.3%. the question is, are the stocks and things like gold due for a correction to follow what has happened already for some of the asset classes? >> it's hard to believe that gold corrects too much because of all the free money and the federal reserve's move. stocks, i think we'll have more clarity in the fourth quarter once we get through the election. that's certainly a positive to know who's going to be running the country. secondly, we're expecting a bounce back in earnings for the fourth quarter. i can't believe that a contraction in earnings for the third quarter is priced into this market. >> i think that's what we're seeing in the stock market. we have ben willis. what do you think? are stocks overguesstimating what the earnings are going to
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look like? >> i think we've bumped up against a ceiling that we can expect. we hit the targets of any of the major strategists you've seen on wall street. we're at the annual highs prematurely, if you will. i would think it's wise to anticipate a pullback in the broad market in that sense based on -- you saw the inflation of assets based on what the central banks have done. that's going wean away, fade awe into the fourth quarter. we're going to need the earnings from those companies to hold these levels. i think in broad strokes, look for that pull back. >> maria, i know you have to get going. >> do you have any insight into what happened at the end of the day? the market was down almost 80 points. comes rieght back in a few minutes. >> you saw the posting of the imbalances to buy on the new york stock exchange floor affected by a major, major reawaiting in the s&p. the mathematics are changing on it. the volume is going to explode. you'll see a major move in the indices, mostly pressure on the
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dow with upward pressure on the s&p. >> there you are. i will see you next week. have a good weekend. see you at the top of the hour. >> one more thing, the best performing sectors in the quarter. number one was energy. number two, technology. number three, telecom. so risk on was very much the trade. the worst performers in the quarter, utilities, the consumer staples, industrials, materials, health care. do you think it switches for the quarter? >> our u.s. strategist adam parker, as you know, back in june went overweight with energy. he's basically gone back now down to underweight after this big move in the quarter. you've seen weakness in the oil price because the excessive supply and weakening demand. >> where are you going to put the money? >> we're going to put the money into health care and tech. those are the two he likes the most. >> okay. very good. a little more defensive nan the
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fourth quarter. gentlemen, good to see you both. that is going to do it for this first hour of the "closing bell." we close out the third quarter with pretty solid gains for the equity market. the question is, can that continue? the fourth quarter? hour number two continues now with maria bartiromo. have a great weekend. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. wall street's bears getting the last word in an otherwise solid third quarter. but it was a volatile final few minutes with the dow dropping by about 80 points just about ten minutes before the close only to recover, finishing with a loss of about 50 points. the s&p 500 also down for the sixth time in the past seven trading sessions. here's a silver lining. the benchmark index still rallied nearly 6% for the quarter. coming up in the program, we take a look at

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